CGT and tax returns

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  • Lots on
    replied
    Thank you for your kind words JP and the tips re using an accountant. Having been taxed at source all my working life this is very useful information. I will look round for an accountant. A friend of mine who is also a landlord as well as having a day job has one, so maybe a personal recommendation is the way to go. Thanks again.

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  • jpkeates
    replied
    Thank you for your work in the NHS!

    I've found that the first sessions were the most valuable in terms of what could be saved, and the value has diminished slightly and the costs of the returns being done has stayed the same/slightly increased, so it feels like it's less worth it.
    But, obviously, some of the savings recur each year and there's a lot less stress.

    And the accountancy costs seem acceptable as business expenses (although, as far as I can see they shouldn't really be).
    So you get the standard tax payer's "discount."

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  • Lots on
    replied
    Thank you JP. I am not involved in finance in my job ( I work for the nhs as a clinician) and what I know I have picked up as I go along, so it is definitely something to consider. A one off consultation might be the way forward, to help with tax returns and minimise CGT.

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  • jpkeates
    replied
    I should add that I have had quite a lot of experience of business finance and tax from my work, so there wasn't expecting there to be too much that I'd missed in my planning.
    The less you know about tax and accounting the more likely you are to have missed some benefits I'd have thought.

    Leave a comment:


  • jpkeates
    replied
    I found a good accountant by looking for a local firm with offices (above a high street is a usual location) and sending an online enquiry from their web site.
    The lack of response ruled most of them out straight away.
    Met with two of them, like one more than the other and have used them since.

    It's not cheap (the actual cost will vary depending on where you are) and any savings are hard to quantify. I've saved a couple of small amounts, which add up year on year, but are nowhere near the cost of the returns (one for me, one for my wife and one for a trust).

    But each year (except last year) I spend 20 minutes reviewing my finances with them, and this gives me confidence I'm not missing anything. And a couple of times we've had some serious reviews about how the property is owned and whether it's worthwhile restructuring.

    So it's worth it for me, but might not be for anyone else.

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  • Lots on
    replied
    Sorry about all the typos.

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  • Lots on
    replied
    Ok, I’ve have never used an account in my life. How do you find a competent one and how much would it cost ( no point doing it if it costs as much as any savings?).

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  • jpkeates
    replied
    Originally posted by Lots on View Post
    Oh dear. Maybe the NRLA course then. Please don’t tell me that’s a bad idea!
    No idea, I've never interacted with the NRLA - but no reason to think that would be a bad idea.

    I'd involve an accountant personally.

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  • Lots on
    replied
    Oh dear. Maybe the NRLA course then. Please don’t tell me that’s a bad idea!

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  • jpkeates
    replied
    I'd personally suggest never asking HMRC for advice on tax.
    They're not qualified to give it and are working for an organisation that has targets for collecting tax.

    Leave a comment:


  • Lots on
    replied
    Thanks everyone. I’m going to ring HMRC and ask. Last time I did that I was eventually put through to someone who was quite knowledgeable and competent. If that doesn’t work, the NRLA does a tax for landlords course in June, I might do that.

    Leave a comment:


  • Gordon999
    replied
    I believe you can include cost for buildings insurance , council tax for vacant period , rewiring , flooring , redecoration + gardening as operating expense against the rental income in your tax return for 2020-2021. The cost for new kitchen and new bathroom suite may be capital cost and saved for claim after future sale

    Leave a comment:


  • Lots on
    replied
    Thank you JP. There’s obviously a few things to bear in mind, the temptation of course is to put it all down as expenses and get a nice big fat reduction in the self assessed tax bill for this financial year. NRLA do a half day course on CGT which I should probably do. I think the property is probably worth at least £10000 more than it was pre renovation.

    Leave a comment:


  • jpkeates
    replied
    Lots on Yes, sounds like it.
    It's a bit of an art, rather than a science.

    You can also apportion the costs between the two categories.
    If you, for example, think that the result is that the property is worth about £10k more after the work has been done, you can decide that a third of the costs were capital and the rest was operational.

    Keep your records for when you sell the property if you do keep some of the costs as capital.

    Leave a comment:


  • Lots on
    replied
    Thanks jpkeates. I have two rentals and this is not the first tenant, there were tenants in situ previously and their moving out was the opportunity ( and need) for a total refurb. Obviously there was a kitchen nanny bathroom before, but the new ones are improvements. I owned both the properties simultaneously when I inherited the, from my late father. Sounds like I should put most items down as allowable expenses for this tax year then?

    Leave a comment:

Latest Activity

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    even with an RICS' firm's valuation, if the valuers at HMRC think it low they will still challenge it. Ive just dealt with an estate the valuation date for which was during lockdown, and with extensive tenanted interests. The RICS firm arrived at their figure by a completely different methodology...
    07-08-2022, 18:40 PM
  • Inheritance tax Open Market Vakue
    by Bengt Lagander
    Is a red book valuation an "open market value"?

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    Is this the correct definition please?
    07-08-2022, 11:33 AM
  • Reply to Inheritance tax Open Market Vakue
    by Neelix
    A written valuation for probate from an estate agent or 2

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  • Reply to Inheritance tax Open Market Vakue
    by Gordon999
    For assessing property value for estate tax, you would approach 2 or more surveyor firms for their valuation and choose the one who gives the lowest valuation.
    07-08-2022, 12:45 PM
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    by Kekdal
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  • Reply to Stamp duty question
    by Kekdal
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  • Reply to Stamp duty question
    by DoricPixie
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  • Reply to Stamp duty question
    by jpkeates
    I used to believe that as well - the HMRC manuals are pretty clear about the situation in my view.

    Which made the surcharge rules a real trap for anyone who owned a let property (maybe for some years) and, who then wanted to buy a home of their own).
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    by DoricPixie
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    03-08-2022, 12:57 PM
  • Reply to Stamp duty question
    by jpkeates
    It seems to depend on the timing.

    I used to think that if you owned another property which you let, you were just screwed, because of the second property thing (even if it was your residence you were buying).

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    03-08-2022, 12:11 PM
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